Ambiguous Insurance Policies Construed in Favor of Insured

If an insurance policy provision is deemed ambiguous, it will always (at least in Florida) be interpreted liberally in favor of the insured and against the drafter of the policy. The Florida Supreme Court definitively set this standard last year in the case of Washington National Insurance Corporation v. Ruderman. The court ruled this standard holds regardless of whether there might be extrinsic evidence that could clarify the ambiguity.

Boca Raton injury attorneys know rulings like this have meant insurers are increasingly careful in the language they use in drafting policies. Challenging such provisions has become more difficult, though insurers usually lose when they attempt to write-in exclusions that are overly-broad and confusing to the consumer.

Ohio also follows a similar interpretation of insurance law, and the Ohio Supreme Court recently weighed in on the issue of ambiguity in a commercial general liability policy in Sauer v. Crews. The court ultimately contended that in determining whether a policy provision is ambiguous, the courts have to consider the context in which the specific language is used.

This case started in 2006, when an 86-year-old woman slammed into a flatbed trailer owned by a trucking company. At the time, the trailer was assisting with paving work on a public street, but the vehicle was parked in a no-parking zone without a permit, and blocked most of the 86-year-old driver’s path. She died as a result of injuries sustained in the crash.

Her estate representatives filed a wrongful death lawsuit against the trucking company, as well as the driver of the truck and the owner of the truck. The trucking company in turn filed a third-party complaint against its insurer, seeking affirmation that it was entitled to coverage in the wrongful death action as an insured under the company’s commercial general liability policy.

However, the insurance company counterclaimed, asserting the policy excluded wrongful death coverage.

Prior to trial, the court bifurcated the coverage and liability portions of the case. At a bench trial on the issue of liability, the court found the trucking company was the solely negligent party proximately causing the crash and awarded the estate $252,000.

An appellate court upheld this finding.

On the counterclaim, the court found while the flatbed was “mobile equipment” (which was excluded from coverage), the insurer failed to define the term “cargo,” therefore creating ambiguity and automatically construing the language against the insurer. On appeal, insurer argued the trial court misinterpreted the policy language. Even if the trailer was “mobile equipment,” the policy excluded coverage for claims arising out of the transport of such equipment. The appellate court rejected this argument.

However, the Ohio Supreme Court noted the only recognized exclusions are those that were clearly intended, and if they are subject to more than one interpretation, they will be construed liberally in favor of the insurer.

Here, the high court found the lower courts had isolated the word “cargo” rather than examining it with intended scope of the policy. Had the policy’s overall context been considered, the court held, the policy was not ambiguous in its exclusion of the trailer from coverage.

If you have been injured in an accident, contact the Hollander Law Firm at 888-751-7777 for a free and confidential consultation. There is no fee unless we win.